Articles Posted inwhistleblower

The Department of Financial Services of New York has launched an investigation into popular tax preparation services including TurboTax, which was developed by Intuit, and H&R Block. According to their investigation, these services may have purposefully hidden free tax programs from qualifying customers using deceptive coding techniques and Google Ad strategies.

A total of four tax preparation software companies received subpoenas for similar alleged offenses at the beginning of this month. Mainly, investigators demanded information regarding the programs that were marketed as ‘free’ for users who earn under $66,000 in yearly income.

News of the scheme came to light as users reported being unable to locate the free services being offered. When users signed on to utilize the tax preparation services they were often automatically directed to more costly programs. According to the investigation, many consumers requested refunds after being directed to the more expensive versions of the service but were lied to about their eligibility in an effort to disqualify them from their desired refund.

A report compiled by the leading cryptocurrency intelligence firm, CipherTrace, gives details about the current state of major crypto-based criminal activity. Main highlights of this report include the increase in cross-border crypto payments, Iran’s growing interest in cryptocurrency as a means to sidestep sanctions, and the $356 million in cryptocurrency thefts in that quarter alone. These findings are an attempt to discover common trends in order to assist in developing future legislation against such corruptions.

CipherTrace is a well-known and highly-developed intelligence operation that works to build solutions for monitoring and regulating crypto-based fraud. CipherTrace is often used by leading exchanges, banks, investigators, regulators, and digital asset businesses in order to trace transactions and display compliance with current anti-money laundering regulations in hopes of building trust in the cryptocurrency economy. Their quarterly reports have become a vital data resource when it comes to monitoring and the legislation of crypto transitions.

CipherTrace’s report for this quarter shows a concerning trend involving cross-border crypto payments becoming untraceable as they leave U.S. exchanges after entering offshore locations. In twelve months the crypto transfers from the U.S. exchange to offshore exchanges grew 21 points or 46 percent when compared to the same period from two years before. These transactions fall out of U.S. awareness as they leave the exchange, making them blind spots that are highly difficult to monitor or regulate.

Six years ago engineer Hemanth Kappanna stumbled upon Volkswagen’s diesel emission fraud, which later resulted in the car manufacturer paying a total of $33 billion to settle the charges. Kappanna eventually secured himself a position with G.M. which involved regular communication with the Environmental Protection Agency, but was let go from the company this year during an unexpected round of layoffs. Unable to find a new position within 60-days, Kappanna had to return to India after having lived in the United States for 17 years for his work and research.

Originally, Kappanna was pursuing his doctorate at West Virginia University when he received the opportunity to develop a proposal for a grant for his department of studies. The proposal he helped create involved testing the emissions of German cars equipped with diesel engines. At the time, testing the actual emission results from a moving vehicle was difficult. However, Kappanna and his team invented an innovative and accurate method to gather information about the emissions. It quickly became apparent that the emissions boasted by the German manufacturer, Volkswagen, were very inaccurate.

It was later discovered that Volkswagen had developed a software designed to falsify the results of their emissions, making them appear more favorable than they actually were. However, the real results were not even deemed passable based on environmental standards. Since emissions were not typically tested in real-time, Volkswagen likely never expected their software to be discovered. However, the company eventually admitted to the fraud and investigators later found that 11 million vehicles had been equipped with this software, including 600,000 which were sold in the United States.

An investigation by the U.S. Space Agency found that a metals manufacturer had provided hardware to Nasa backed by fraudulent test results. These materials eventually resulted in a loss of over $700 million, as well as multiple failed satellite launches. The company involved in the fraudulent materials scheme was an Oregon based company called Sapa Profiles Inc., which according to the investigation has falsified thousands of parts certifications throughout its nearly 20 years in business.

According to NASA, the faulty parts were used to surround a rocket named the Taurus XL, which was designed to deliver years of satellite research regarding the Earth’s climate. However, with the uncertified parts installed, the rocket was not able to break out of its encasement properly during launch. This effectively destroyed the project and resulted in several years of work and funding put to waste.

Former whistleblower, Everett Stern, states that the crackdown on financial fraud still has a way to go before it can truly be considered a successful pursuit.

A whistleblower is considered anyone who has insider information about a fraudulent act and decides to come forward to law enforcement about such activities. Anyone can be a whistleblower, and if they decide to pursue the matter legally, they will be acting in the name of the government. The government can then choose to step in and settle the matter if they find it to be a worthy endeavor that can benefit from their direct support.

Stern was a whistleblower involved in the case of HSBC, a British bank that was accused of money laundering activities. Stern assisted in this case by providing essential insider information about the bank’s financial details to law enforcement authorities. This case eventually ended in a $1.9 billion fine in repercussions from HSBC.

A whistleblower by the name of Rudolf Elmer claimed that during his work as a private banker and internal auditor for the Swiss financial institution, Julius Baer Bank & Trust Company Ltd., he discovered actions that he found to be deceitful when relocated to the Cayman Islands. When Elmer acted as a whistleblower in this situation, instead of being supported in his efforts, he was fired, removed from the financial world, given time in prison, and even suffered a mental breakdown.

Whistleblower is a legal term that signifies anyone who chooses to report a person or organization for illicit activity. A large portion of whistleblowers are insiders and have directly interacted with the company in question as an employee.

Whistleblowers have the right to take legal action in the government’s name while the government may choose to step in at any point of the process to handle the allegations they find particularly detrimental or unlawful. The United States has a set of laws in place that are designed to protect whistleblowers known as the Whistleblower Protection Act, which has been around for over 30 years with the last major update being in 2012.

Waveney Blackman, the owner of durable medical equipment company WaveCare Health services, has been charged with one act of healthcare fraud for filing claims to Medicaid for products that were never purchased through her business. Blackman pleaded guilty to these charges after one month and has been sentenced to 42 months in prison and ordered to forfeit $9.4 million, the sum of WaveCare’s proceeds from fraudulent claims.

During the years of 2010 to 2016, Blackman filed multiple claims to Medicaid for incontinence products, wound care supplies, and other pieces of durable medical equipment that resulted in revenue of $9.4 million. None of these products were ever given to Medicaid clients or even requested by one. These fraudulent claims were filed by Blackman herself, along with the assistance of her employees through a WaveCare biller.

Within one month of being charged, Blackman signed a plea agreement that detailed the illegal actions taken, as well as the proceeds she received from them. The government has seized a Mercedes, seven properties, and money traced to two separate bank accounts, and the judge ordered Blackman to pay the total of $9.4 million WaveCare reportedly received in fraudulent claims. She will also be sentenced to 42 months in prison.

The Government of Bermuda plans to launch a cryptocurrency focused bank and further international support for cryptocurrency and blockchain technology. The news was announced by Bermuda Premier David Burt during a conversation with the BBC journalist Priya Patel at the World Economic Forum in Davos, Switzerland.

“I’m proud to say that next week we’ll be making an announcement revealing that a bank will be set up in the county that will start accepting crypto and blockchain companies,” said Burt.

According to an investigative report in the Wall Street Journal, the heavy tariffs imposed on Chinese goods has resulted in a large increase in tariff evasion schemes by Chinese companies seeking to sell their goods here. Customs officials, importers and shipping brokers say that the tariff increases are being countered by unscrupulous Chinese manufacturers who are fraudulently shipping products here under false manufacturers codes and through trans-shipping and falsifying the actual country of origin, according to the Wall Street Journal. The result is that the tariffs are failing to protect. The tariff evasion using fraudulent product codes relates to 10-digit designation called an HTS code, of which there are 18,927. These codes are required to identify products and varieties. Unscrupulous manufacturers seeking to evade our tariffs send the products in with codes which designate products which are not on the tariff list.https://www.wsj.com/articles/the-u-s-china-trade-battle-spawns-a-new-era-of-tariff-dodges-1539009200?mod=hp_lead_pos5

One indicator of the misclassification increase is that there were 146 rulings in July, nearly triple the number six months earlier and this is considered the tip of the iceberg. In one example included in the WSJ article, a wood importer in Oregon received a call from a supplier asking if he would like some Chinese plywood tariff free. The importer asked how this would happen and the response was don’t worry about it as the plywood would not contain any Chinese markings and it would be shipped under some other code.

Diamond saw blades made in China now carry 82% tariffs. In July, two California importers controlled by a Chinese manufacturer tried to dodge the tariff by coding diamond saw blades as grindstonesaccording to Customs. The maker, Danyang Like Tools Manufacturing Co., claimed independent of the California importers but one of them told the agency Danyang was its owner. The California firms have disputed the charges.